Should I withdraw from my retirement accounts?

We are finding ourselves afraid to go into debt after our baby, but need to pay for daycare costs and course tuition to renew my nursing license. (Total would be around $10K). It will be a few months before I start making money again and we have nothing to spare and are barely able to stay afloat paying for kids in braces & sports, the mortgage, health insurance and all the usual bills.

Does it make sense to withdraw from our retirement accounts here?

Debt, Retirement
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August 2017
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Under normal circumstances, withdrawing funds prior to age 59 1/2 is not necessarily a good idea. It's hard enough to put these funds away much less keep them for 25 to 30 years into the future. However, you sound like you're up against a wall and if the funds that you need are available I would definitely consider making the withdrawal from the retirement account if there are no other options. Before you do, be sure you understand the rules. Let's assume you make a withdrawal of $10,000 in the calendar year 2017. First, there will be a 10% tax penalty of $1,000 that will be added to your total tax bill come next April 15th. In addition, the $10,000 that you withdrew will be added to your taxable income for the calendar year 2017 and additional taxes will be due on that amount.  If however your retirement funds are tied up in a 401(k) or 403-B plan, you might see if requesting a loan from the plan that can be paid back over 60 months is a possibiity. If this is in fact a possibility, there will be no tax. I hope this helps and good luck. 

August 2017
August 2017
August 2017
August 2017